What sourcing category would the following items typically be classified in? Item A: high volume/value, low risk, multiple potential suppliers Item B: low volume/value, high risk, very few potential suppliers

This item is in high volume and has a low risk factor because there are multiple potential Suppliers present in the market. Because of this you can choose the SINGLE SOURCING STRATEGY because you can easily switch to others if one is unable to supply you with the good.

Item B:

This item has a low volume as the Suppliers are equally low. This means that the risk factor here is quite high. Because of these factors it is best to use a MULTIPLE SUPPLIER STRATEGY to mitigate the risk that one supplier will not have it. This was many options are available.

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ayfat23 ayfat23 · Answer 2 · 2021-10-26T14:06:45+02:00

The categorization of the given item A and B can be done this way

[Single sourcing] item A: high volume/value, low risk, multiple potential suppliers

[Multiple sourcing] Item B: low volume/value, high risk, very few potential suppliers

Single-sourcing can be regarded as strategy which involves passing all purchase orders of a particular product over to one supplier.

It involves buying in bulk as well as consistently, from one single vendor, however it is of low risk and high volume.

Multiple sourcing strategy can be regarded as strategy which involves passing all purchase orders of a particular product over to numbers of supplier.

It helps the company to more buyers, but with high risk and very few potential suppliers

Therefore, Multiple sourcing strategy involves spreading of demand on numbers of supplier while Single-sourcing involves just one supplier.

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